But the market clearly sees a buyout as a distinct possibility with VT up 75.5p, or 14.9%, at 583.5p in late trading. Babcock shares are down 28.5p, or 5.2%, at 525p. Mouchel shares are down 41p, or 16.4%, at 209p.

Engineering company Babcock says its offer is comprised of 245.5p in cash and 0.701 new Babcock shares for each VT share. That amounts to an aggregate value of 633.9p per VT share, representing a premium of 24.8% to the current share price, Babcock added in a statement.

It comments:

"It is disappointing that VT's Board has declined to discuss this further with Babcock or to engage with a view to exploring terms which might be acceptable to them. Babcock believes it is in the interests of both companies' shareholders for Babcock and VT to work together towards an agreed transaction for the mutual benefit of all stakeholders.

"Babcock has identified significant merger benefits (excluding any growth synergies), quantified at approximately £27 million per annum pre-tax. Substantially all of the benefits are anticipated to be achieved by the end of the first full year following completion of the proposed acquisition. In addition, a further benefit of approximately £6 million per annum is estimated to come from a reduction in the effective corporation tax rate of the combined group post acquisition."